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r/CryptoCurrencySee Post

Goldman Sachs (GS) Offers Bitcoin-Backed Loan (BTC) in Crypto Push - Bloomberg

r/BitcoinSee Post

Where is my 100 BTC s?

r/CryptoCurrencySee Post

GS and AcknoLedger had a NFT discussion yesterday at Twitter Space. AcknoLedger is a Global Consortium that maps, monetize, and distributes Web 3.0 Digital Assets. More details? Visit Genesis Shards on Twitter, Medium and Telegram.

r/SatoshiStreetBetsSee Post

The first market place for pre IDO tokens on NFT's @GenShards / $GS #NFT is a hot topic this year with so many developments happening within that category The question is, what is it?

r/CryptoMoonShotsSee Post

GhettoStorks | NFT and Token Launch coming on BSC | Professional Team | Get In Here !

r/CryptoMoonShotsSee Post

There are manually generated unique 1,000 Ghetto Storks NFT and upcoming token

r/CryptoMoonShotsSee Post

There are manually generated unique 1,000 Ghetto Storks NFT with Upcoming Token

r/CryptoMoonShotsSee Post

There are manually generated unique 1,000 Ghetto Storks NFT with upcoming Token Launch

r/SatoshiStreetBetsSee Post

NFTO sale for @Karmaverse_io - now live ! Chain - Polygon, Currency - USDT 👉 Guaranteed whitelist slots open now on GS Market (https://t.co/DXwZNzUA8F) 📌 You should have been whitelisted for the NFTO 📌 You should also have completed your KYC on the GS WebApp

r/CryptoMoonShotsSee Post

Unique 1,000 Ghetto Storks NFT collection launch with Token - Upcoming marketing - cmc - cg

r/CryptoMoonShotsSee Post

There are manually generated unique 1,000 Ghetto Storks NFT - With token - Upcoming utility

r/BitcoinSee Post

Goldman Sachs and JP Morgan are buying cheap Russian Bonds. Widely share, they need to be called on this as they're playing both sides

r/CryptoMoonShotsSee Post

Nft gaming stars | gs1 | bsc gem with real utilities | nft p2e and metaverse coming by summer |decentralized website | cex and dex live | staking pools with 60% apy | burn every month

r/CryptoMoonShotsSee Post

🔥$Galaxy Shiba - 💎 Just Launched On PancakeSwap | 8% Auto $BUSD Rewards |CMC,CG Listing Incoming | Investment DAO | NFT Marketplace | Staking | Detailed Roadmap in website | Mobile Game Launching soon |

r/CryptoMoonShotsSee Post

🔥$Galaxy Shiba - 💎 PancakeSwap Listing in 10 Minutes💎 | 8% Auto $BUSD Rewards |CMC,CG Listing Incoming | Investment DAO | NFT Marketplace | Staking | Detailed Roadmap in website | Mobile Game Launching soon |

r/CryptoCurrencySee Post

This is what blockchain adoption looks like! OriginTrail Decentralized Knowledge Graph (OT DKG) sitting at the very core of the coming Pharma Industry logistics standardization, presented by British Standard Institute (BSI) and Poseidon, for their Pharmaceutical partners.

r/CryptoCurrencySee Post

Metaverse has an upcoming AMA this January 31, 2022! To be held @GenesisShards Metaverse Lab — A One-stop Launchpad for the best and most professional #Metaverse projects Date : 31 Jan, 1pm UTC #GenesisShards #NFT #GenPad #DeFi #IDO $GS

r/BitcoinSee Post

Ex-Goldman CEO Lloyd Blankfein says ‘crypto is happening’ despite plunge in digital assets

r/CryptoCurrencySee Post

Ex-Goldman CEO Lloyd Blankfein says ‘crypto is happening’ despite plunge in digital assets

r/BitcoinSee Post

📢 Announcement 📣 New Listing: GS1 Dear customers, We are pleased to announce that NFTgamingStars (GS1) will be listed on Azbit exchange, Deposits, trading and withdrawals will be open at 6 PM (UTC) January 21, 2022. 🔥 Trading pairs: GS1/USDT, GS1/BTC, GS1/ETH, GS1/BNB.

r/CryptoCurrencySee Post

Tomorrow is a big day for #GS1 🚀

r/CryptoMoonShotsSee Post

Origin Trail $TRAC - The worlds fully decentralized knowledge graph network that will be the foundation of Web3. Partnered with Oracle, Polkadot, Walmart to just name a few. Top 20 Project!

r/CryptoCurrencySee Post

I asked 47 different Web3 founders, investors, thought leaders, and developers one question: "What do you believe that a majority of people in crypto disagree with you on?" Here is what they said.

r/CryptoMarketsSee Post

Bitcoin’s 2022 Drop Might Be Good

r/CryptoCurrencySee Post

Bitcoin’s 2022 Drop Might Be Good

r/CryptoCurrencySee Post

What price should I ask for all my miners?

r/CryptoCurrencySee Post

PSA - FUCK Club Swan (crypto debit card company)

r/CryptoCurrencySee Post

So it is a flash crypto sale. all your favorite coin/token for 10%~20% off. one week only!

r/CryptoMoonShotsSee Post

Good Shit (GS) token on Etherium at 78k MC, next 100x

r/CryptoCurrencySee Post

New play to earn game like axie infinity

r/CryptoCurrencySee Post

Ethereum Price Prediction for the Immediate Future

r/CryptoMoonShotsSee Post

GangsterShiba Token | $GS | New low marketcap token | Liquidity locked |

r/CryptoMoonShotsSee Post

GangsterShiba Token | $GS | New low marketcap token | Liquidity locked | Slippage 12-14%

r/SatoshiStreetBetsSee Post

Mid-cap GEM OriginTrail (TRAC) about to get listed on Coinbase?

r/CryptoCurrencySee Post

OriginTrail - Due Diligence - Part 3 - Nestle, HomeDepot, WEF + Deloitte report, BofA report, BSI in discussions witha a very large footwear company, CargoX + Egyptian Government - Links and sources to everything!

r/CryptoCurrencySee Post

HOME DEPOT x ORIGINTRAIL. Ken McElroy, Global Manager Trade Risk & Export Compliance at Home Depot, confirms their partnership and explains the scope & vision.

r/CryptoMoonShotsSee Post

Pre Sale continues through the weekend! Launching next week! lilcoin ($lil)

r/CryptoMoonShotsSee Post

Pre-Launch at 50% for the next 24 hours!

r/CryptoMoonShotsSee Post

Launch Tomorrow at 8pm ET

r/CryptoMoonShotsSee Post

Two Days till Launch

r/CryptoMoonShotsSee Post

lilcoin: Daily Rewards from self-arbitrage...zero fee's

r/CryptoMoonShotsSee Post

lilcoin: first-ever tokenized arbitrage-bot...get daily rewards

r/CryptoCurrencySee Post

Take a walk on the supply side: OriginTrail TRAC

r/CryptoMoonShotsSee Post

🎉Gold Sabaka Stealth launch / just launch / join telegram for more info / biggest moonshot

r/CryptoCurrencySee Post

This is my well researched hidden gem. Feel free to share yours

r/BitcoinSee Post

Lightning: Small giveaway via voucher

r/CryptoCurrencySee Post

JP Morgan "without the need for branches" and Goldman Sachs imagine digital-only expansion

r/CryptoCurrencySee Post

Bank of America Analyst Raises Price Target of Bitcoin to $87,000

r/CryptoCurrencySee Post

How/why is noone talking about crypto that pays dividends? I bought into an alt DeFi coin a few days ago and I’ve already made a better return in BNB than my High Yield Savings account with GS. While the alt coin is risky, Binance is far more established. Thoughts?

r/CryptoMoonShotsSee Post

GodSpeed gonna make you prosper! We have just came live, join us now before we pump it up! Based Dev | Fresh Launch | Low MCAP | Marketing Incoming!

r/CryptoMarketsSee Post

List of Today's and Tomorrow's Upcoming Events

r/CryptoCurrencySee Post

Goldman Sachs: "Crypto: a new asset class?'

r/CryptoCurrencySee Post

Daily Breakdown - June 20, 2021

r/CryptoCurrencySee Post

In This Episode of "The Whaleish Games"

r/CryptoMoonShotsSee Post

Origin Trail $Trac - OriginTrail is a neutral, open-source protocol enabling data sharing between companies and organizations. It utilizes decentralized nodes and an off-chain technology stack to interface with legacy systems as well as other blockchains (permissioned and permissionless).

r/CryptoCurrencySee Post

Genshard ($GS) - Anyone interested in this project? It is difficult to find information about it. I spent 1 week learning about it. Really shocked. This diamond is buried pretty deep

r/CryptoCurrencySee Post

So here's what I think will happen to the price of Bitcoin when Elon tweets one year from now.

r/CryptoCurrencySee Post

A new crypto currency or a scam?

r/CryptoMoonShotsSee Post

🔥 GeneralShiba 🔥 $GS [1.9k MC] - Just Launched - Community Token Ownership Renounced

r/CryptoMoonShotsSee Post

$GreenShiba $GS | 💎2k MC | 🔒Liquidity BURNED 🔥 | 🐳 Support ✅✅BSC Token

r/CryptoMoonShotsSee Post

$GreenShiba $GS | 💎2k MC | 🔒Liquidity BURNED 🔥 | 🐳 Support ✅✅BSC Token

r/CryptoMoonShotsSee Post

$GreenShiba $GS | 💎5k MC | 🔒Liquidity BURNED 🔥 | 🐳

r/CryptoCurrencySee Post

Must Read, Goldman Sachs report on the cryptocurrencies market

r/CryptoCurrencySee Post

List Of Major Companies Accepting And Adopting Bitcoin

r/BitcoinSee Post

Why Elon trashing Bitcoin is great news

r/CryptoCurrencySee Post

Why Elon trashing Bitcoin is great news

r/CryptoCurrencySee Post

Best Crypto Faucets 2021

r/CryptoCurrencySee Post

Doge investment that pays off, this Investor goes to the moon and doesn’t look back. Plus GS is reversing their decision to invest in crypto.

r/CryptoCurrencySee Post

Why I left Goldman Sachs for Crypto

r/CryptoCurrencySee Post

Ethereum, the world’s second-largest cryptocurrency, soars above $4,000 for the first time

r/CryptoCurrencySee Post

Crypto Jobs in the Future? (Lucrative, fun, and interesting to learn about)

r/BitcoinSee Post

XBT is doomed blah blah

r/CryptoCurrencySee Post

MIT Online Blockchain and Money course - FREE! Solid fundamentals!

r/CryptoCurrencySee Post

Blockchain and Money Course FREE from MIT Online

r/SatoshiStreetBetsSee Post

MIT Online Blockchain and Money Course - FREE! Solid foundational course

r/CryptoMarketsSee Post

MIT Online Blockchain and Money Course - FREE! Solid foundational course

r/CryptoCurrenciesSee Post

MIT Online Blockchain and Money Course - FREE! Solid foundational course

r/CryptoCurrencySee Post

MIT Online Blockchain and Money Course - FREE! Solid foundational course

r/CryptoMoonShotsSee Post

Genesis Shards $GS

r/CryptoMoonShotsSee Post

🚀🚀Alliance Protocol $Ally 🚀🚀💎Low market cap 💎- 100% Community driven - 🚨Audit by Solidity.finance!🚨

r/CryptoCurrenciesSee Post

Origin Trail (TRAC) will connect with EVM compatible blockchain ecosystems like Moonbeam, Binance Smart Chain (BSC), Polygon/Matic and NEAR. Origin Trail is slowly becoming the Google of supply chains…

r/CryptoCurrencySee Post

Origin Trail (TRAC) - A Low-Cap Alt With a Real World Use Case (Some Existing Adoption), Excellent Tokenomics, an Established Team and History, and a Shoutout From the World Economic Forum.

r/CryptoCurrenciesSee Post

A look into the pillars of Genesis Shards

r/CryptoCurrenciesSee Post

A look into the pillars of Genesis Shards

r/CryptoMarketsSee Post

A look into the pillars of Genesis Shards

r/CryptoCurrencySee Post

A look into the pillars of Genesis Shards

r/CryptoMoonShotsSee Post

A look into the pillars of Genesis Shards

r/SatoshiStreetBetsSee Post

A look into the pillars of Genesis Shards :fire:

r/CryptoMoonShotsSee Post

Alliance.Protocol is live on PancakeSwap, 2 days old

r/CryptoMoonShotsSee Post

🚀🚀Alliance Protocol $Ally 🚀🚀💎Low market cap 24 hours old💎- 100% Community driven - 🚨Audit in process by Solidity.finance!🚨

r/CryptoMoonShotsSee Post

Alliance.Protocol - Audit in process by solidity.finance

r/CryptoMoonShotsSee Post

🚀🚀Alliance Protocol $Ally 🚀🚀💎Low market cap 24 hours old💎- 100% Community driven - 🚨Audit in process by Solidity.finance!🚨

r/CryptoCurrencySee Post

Whales 🐳 Take Profits 💴 💰 Timeline??

r/CryptoCurrenciesSee Post

Finally. The time has come

r/CryptoMoonShotsSee Post

AllianceProtocol [Low market cap] [1 day old] [~500 holders] Audit in process! Long term not a d&p!!

r/CryptoMoonShotsSee Post

🚀Alliance Protocol $Ally Audit in process by solidty.finace, Very low market cap, 24 hours old🚀

r/CryptoMoonShotsSee Post

Alliance Protocol $Ally very low market cap less than 10 hours - 100% Community driven

r/CryptoMoonShotsSee Post

$Ally Alliance Protocol just reached $1.1M Market cap :rocket:

r/CryptoMoonShotsSee Post

Alliance.Protocol - 400+ Holders in 4 hours - $1.1M market cap

r/CryptoMoonShotsSee Post

🔥Alliance.Protocol🚀 is live on pancake swap , very early, 2 hours old!

Mentions

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

Mentions:#ANG#GS

Fair point! Thank you. But I guess my perspective falls to "who is managing these funds?" If GS has their hands on the management table, yeah financial system is fucked. If they don't, doesn't that mean we need the help of a financial system? Only reason I say that is if I give a financial advisor my money, and they so shady shit. Am I to blame?

Mentions:#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/umsqe8/monthly_optimists_discussion_may_2022/).

Mentions:#ANG#GS

It would be nice if it were that simple. It reveals to the public that there is market manipulation. But, knowing something is not enough. Proving and being able to do something about it is another. If you've never traded securities, then explore the history of it. GameStop's stock is a prime example. There's more to retail holding and buying GME than just because of the business. Not to say that it's not a good company to invest in. But, it's a movement as well to expose the corruption. Hence, the debacle last year with the brokerage halts/restrictions and Congressional Hearings. The ongoing push to DRS which you could relate to moving crypto off-exchange but it's direct registration of shares out of the DTC. That's why you constantly see the tag #NoCellNoSell because out of mere principle, people are buying and holding to squeeze out more than short positions. It's to cause losses to who finances them along with their abuse of privileges in the market through lending, AP status, broker-dealer contract writing and swaps, etc. The Federal Reserve and the Banks who control, such as BoA, JPM, WF, GS, are the problem that started with fiat and was the philosophy behind why crypto could be what society needs to detach our utility of exchange from the Central Bank. However, it probably wasn't foreseen that all of the sources of creating, supporting, utilizing, and hosting the asset would be owned by the financial tyrants. So, moving crypto off exchange into private, cold storage is a start.

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

O, I didn't mean you're a rat: the rat is the prospect that Coinbase may be using customers' BTC as collateral in exchange for their fiat loan from GS. I guess, unless there's a leak, Coinbase customers will never know until, and if, it's too late. Using our BTC to back a fiat loan for themselves would obviously be unethical and against whatever fiduciary responsibility Coinbase may have but then again banks do fractional reserve loans as a matter of course so ... it's rats all the way down.

Mentions:#BTC#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

Good job, GS, catching up to where Compound was 3 years ago!

Mentions:#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeFi ... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ufshqo/monthly_skeptics_discussion_may_2022/).

Mentions:#ANG#GS

I'm sure GS will be totally cool and not liquidate your BTC loan during a flash crash... anyone putting any faith in that group is insane

Mentions:#GS#BTC

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeF... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ttir1a/monthly_skeptics_discussion_april_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeF... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ttir1a/monthly_skeptics_discussion_april_2022/).

Mentions:#ANG#GS

K, lets break this down: > “Goldman Sachs (GS) has offered its first bitcoin-backed loan in the latest sign that Wall Street is moving further into crypto. Bloomberg first reported on the news.” Bloomberg didn’t “report”….Goldman’s PR team reported TO Bloomberg. > “Goldman’s secured lending facility allowed a borrower to use bitcoin (BTC) as collateral for a cash loan.” Soooo…..like everyone else.…go on? > "We recently extended a secured lending facility where we lent fiat collateralized on BTC; BTC being owned by the borrower," a Goldman spokeswoman told CoinDesk in an email. "The interesting piece for us was the structure and the 24-7-365 day risk management." Think of this like listening to your child tell you about a science project. Just nod your head, smile, and pretend to be excited… > “Goldman, which has a dedicated digital assets team, traded its first over-the-counter bitcoin options to Galaxy Digital last month.” That’s sooo great,honey….I love your project! > “Goldman is following in the footsteps of other traditional finance giants moving further into crypto. Last month, Cowen launched a digital assets unit and BlackRock (BLK) participated in the $400 million funding round for USDC stablecoin creator Circle. Earlier Thursday, news broke that private equity investment behemoth Apollo Global Management had hired former JPMorgan (JPM) executive Christine Moy to serve as its first head of digital assets strategy.” > ooohhh my god honey! Your project is soo going to be the most amazing! Don’t get discouraged by what those other kids are doing. Just be proud of yourself!!! #AvoidtheCucks

Everyone who thinks this is exciting and revolutionizing, including GS, don't understand the oracle problem. This is just another one of this "let's do something with blockchains. Any ideas?" projects that pop up all over the place and will result in nothing because the whole idea is fundamentally dumb.

Mentions:#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeF... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ttir1a/monthly_skeptics_discussion_april_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeF... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ttir1a/monthly_skeptics_discussion_april_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeF... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ttir1a/monthly_skeptics_discussion_april_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeF... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ttir1a/monthly_skeptics_discussion_april_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the railway and horse-drawn carriage industries](https://books.google.com/books?id=IpRBuPlQ65YC&pg=PA36#v=onepage&q&f=false). > > - How do industry leaders influence regulators? Well, [they're often one in the same](https://i.redd.it/bekphnqftcb41.jpg): > > - The [revolving door](https://en.wikipedia.org/wiki/Revolving_door_\(politics\)) between business and government means that regulators often had jobs in the industry they now oversee. > > - This career pathing clearly has consequences: [conflict of interest, unfair distribution of influence and competitive advantages](https://strathprints.strath.ac.uk/26895/1/43264684.pdf). > > - The result is **[regulatory capture](https://www.investopedia.com/terms/r/regulatory-capture.asp)**: [It's common for regulators to get 'captured' by the industry they regulate, i.e. they lose sight of doing their job neutrally and act in the interests of the industry.](https://www.bankofalbania.org/rc/doc/Benink_ANG_indd_10166.pdf) > > - Most relevant to the regulation of crypto is how the revolving door and regulatory capture shape the rules of global finance to benefit incumbents: > > - [One study on this reports that central bank governors and finance ministers are more likely to deregulate the industry if they previously worked in the finance sector.](https://www.oecd.org/corruption/integrity-forum/academic-papers/Wirsching.pdf) > > - Or just look at the direct pipeline from Goldman Sachs into government: top roles in [international central banks](https://www.investopedia.com/news/26-goldman-sachs-alumni-who-run-world-gs/), [the US Treasury Dept, the Federal Reserve](https://www.nytimes.com/2017/03/16/business/dealbook/goldman-sachs-goverment-jobs.html), and [now the SEC](https://www.trustnodes.com/2021/09/22/gary-gensler-paid-by-goldman-sachs-disclosure-reveals) continue to get staffed by GS alums. > > >"[This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs](https://www.opensecrets.org/news/2017/03/revolving-door-goldman-sachs/)." > > ##Square peg, round hole? > - It's not surprising that regulators with deep ties to a legacy system try to apply old rules to a new technology. > > - The same has happened with regulating other disruptive systems, like the Internet: > > - While regulations are marketed as innovative solutions to modern issues, things like net neutrality "[are actually vestiges of long-outmoded ways of thinking about telecommunications policy](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf)." > > - I'd argue that [applying a 75-year-old regulatory framework like the Howey Test](https://www.investopedia.com/terms/h/howey-test.asp) to a new crypto asset class follows the same pattern. > > - It gets messy when a crypto*currency* > can be many things - sometimes multiple things at once ([a store of value like gold, a security or bond, a currency, a networking protocol, etc.](https://cdn.substack.com/image/fetch/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F87422a17-c6fe-4c1f-8770-b185354ce741_1478x830.png)) > > - And even messier when there's no instruction manual on how to fit a 'decentralized peg' into a 'centralized hole' - a point brought up by Andreas in his 2014 testimony: > > >"[I believe that the best way to help Bitcoin is to ensure that there is clarity in the treatment of Bitcoin. And that Bitcoin is not essentially forced into contorting itself into regulatory structures that are designed by banks for banks or with traditional models of finance in mind, which are primarily centralized.](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/)" > > - Unfortunately guidance is still lacking 7 years later. The Howey test looks easy to comply with but, according to SEC Commissioner Hester Peirce: > > > "[ non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business.](https://www.sec.gov/news/speech/peirce-how-we-howey-050919)" > > - We recently saw the exact 'contorting' Andreas predicted play out in the US, as [over-broad crypto regulation was added on to an infrastructure bill](https://decrypt.co/77309/congress-likely-pass-550-billion-infrastructure-bill-threatens-kill-crypto-industry): > > - The bill's language lumped together custodial actors like exchanges with non-custodial actors, like miners and validators - basically forcing decentralized systems to follow centralized rules: > > - It would be impossible for decentralized protocols, software developers, miners or validators to collect 1099 forms from everyone interacting with their services. As Compound general counsel Jake Chervinsky said, "[It defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.](https://decrypt.co/77838/rival-amendment-senate-infrastructure-bill-threatens-proof-stake)" > > - Really [vague guidance on virtual assets from the Financial Action Task Force](https://www.fatf-gafi.org/media/fatf/documents/recommendations/Updated-Guidance-VA-VASP.pdf) seems a further attempt to kneecap permissionless, decentralized systems on the international stage. > > - dYdX general counsel [Marc Boiron broke it down on Twitter, with the conclusion that "FATF claims to be technology neutral but that can't be true where it requires removing key benefits of the technology to comply. It is gutting DeF... ***** Would you like to learn more? [Click here](/r/CointestOfficial/comments/r6w0hm/general_concepts_round_regulation_conarguments/) to be taken to the original topic-thread or you can scan through the [Cointest archive](/r/CointestOfficial/wiki/cointest_archive#wiki_government_regulation) to find arguments on this topic in other rounds. Since this is a con-argument, what could be a better time to promote the Skeptics Discussion thread? You can find the latest thread [here](/r/CryptoCurrency/comments/ttir1a/monthly_skeptics_discussion_april_2022/).

Mentions:#ANG#GS

#Regulation Con-Arguments Below is an argument written by MrMoustacheMan which won 1st place in the Regulation Con-Arguments topic for a prior [Cointest](/r/CointestOfficial/wiki/cointest_policy) round. > #Regulation - Con Arguments (1/2) > > >First they ignore you, then they laugh at you, **then they fight you**, then you win. > > - *Disclaimer: reusing my previous entry [from here](https://np.reddit.com/r/CryptoCurrency/comments/pfoowf/rcc_cointest_general_concepts_regulation/hej2i4k/).* > > - In outlining some cons against regulation below, I admittedly have a US focus. > > - I also quote from Andreas Antonopoulos' 2014 testimony before the Canadian Senate Committee on Banking, Trade, and Commerce because (unfortunately) it's still relevant. I encourage you to [read it](http://qntra.net/2014/10/andreas-antonopolous-testifies-before-canadian-senate-committee/) or [watch it](https://youtu.be/xUNGFZDO8mM) in full. > > - **TLDR**: the [history of regulating *other disruptive technologies* like the Internet provides some key takeaways](http://www.progressivepolicy.org/wp-content/uploads/2014/03/2014.03-Ehrlich_A-Brief-History-of-Internet-Regulation1.pdf): > > - "Technology, business models, and consumer behaviors change." *As they change, the meaning and effect of existing regulations also change.* > > - "Do new technologies and business models differ from existing ones?" *If so, regulation should reflect these differences - but they often don't.* > > - "Money flows where regulation (or the absence thereof) encourages it to flow." *A fragmented regulatory landscape hurts consumers and detracts from innovation.* > > ##Special interests > > - This year we've seen [heightened regulatory action around crypto](https://decrypt.co/81412/overly-stringent-crypto-regulations-preclude-banks-crypto-financial-trade-groups), especially [in the US](https://decrypt.co/80685/ripple-coinbase-uniswap-under-fire-from-sec-fight-back). > > * I think we should be concerned about [the direction things are taking](https://www.nytimes.com/2021/09/05/us/politics/cryptocurrency-banking-regulation.html): namely, regulation that stifles innovation and individual rights, regulation that handicaps a nascent sector to protect established interests rather than consumers. > > - The [significance and power of lobbying on US governmental decision making](https://en.wikipedia.org/wiki/Lobbying_in_the_United_States) is a lot to digest. > > - But the system functions today to benefit legacy players and the cards are stacked against newcomers, especially those who aim to disrupt the status quo: > > >"[Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.](https://scholar.princeton.edu\/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)" > > - There is a long history of established industries influencing regulators to limit competition from disruptive innovation: > > - The history of '[Red flag laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)', which attempted to restrict the growing popularity of automobiles has a lot of [parallels with how crypto has been treated](https://news.bitcoin.com/bitcoin-menace-automobile-21st-century/). These regulations were often [influenced by lobbying from the ra